I write on behalf of Field Fisher
Waterhouse who practice in the fields of Personal Injury and
Clinical Negligence Law, and who are therefore stakeholders in the
proposed reform of civil litigation funding and costs both as
lawyers and as representatives of our clients who are often very
seriously injured through no fault of their own and require access
to justice.

We are also responding separately to
the government’s Legal Aid Consultation Paper (MOJ CP 12/10).

Conditional Fee Agreements and
Success Fees (pages 18-29)

We note the government’s provisional
view that recoverability of such success fees should be abolished
and this is supported by the Jackson Review.

We do have some concerns in relation
to this. We report that (contrary to the Jackson View) this firm
does undertake risky cases and largely the success fees are not
“windfalls” because they are used to pay for cases which do not
proceed. This is particularly the case in the industrial disease
area (we have a significant practice in which we recovered around
£13million damages in 2010). Many enquiries are received, some are
investigated and “dropped” at any early stage but others are taken
on beyond issue of proceedings and are unsuccessful (Only this week
an asbestosis case was withdrawn a few days before trial). This is
replicated in our clinical negligence and our (high value) personal
injury cases. Without these success fees it would be economically
impossible for us to continue to act for all the Claimants whose
case we investigate now. This will clearly restrict access to
justice for those who receive serious injury through no fault of
their own.

We do not think that the increase in
general damages by a factor of 10% will “compensate” for this.

We would urge the government to
maintain the present system where success fees are largely fixed
and allow solicitors to take on cases which are risky thereby
ensuring access to justice for severely injured clients who are
often the lowest socio-economic groups in society already.

In response to the questions posed on
pages 28-29 of the Consultation Paper we submit:-

Question 1

We consider that success fees should
continue to be recoverable from the losing party.

Question 2

For the avoidance of doubt, we
consider that success fees should be recoverable in road traffic
accident, employer’s liability and clinical negligence cases.

Question 3

No comment. We do not act in judicial
review cases.

Question 4

We consider that the fixed success fee
regime works well. We do not consider that recoverability of
success fees should be limited to 25% of the damages in all cases.
It is important to emphasise that the costs of personal injury and
clinical negligence litigation are largely determined by the
actions of the Defendant solicitors. They drag cases out. There
should be an incentive for Defendants to settle as early as
possible and the “staged” recoverable success fee should continue
to be supported by the government so that the Defendants understand
that the earlier cases are concluded the lower the success fee and
overall costs are likely to be. If the government enacts a rule
which limits success fees to 25% of the damages, the Defendant will
have no incentive to settle cases early and solicitors and
barristers will not be remunerated properly. Risky cases will not
be pursued.

Question 5

We consider that the success fee
should be recoverable from the Defendants in all cases. It is not
appropriate to limit this to particular categories of personal
injury case.

Question 6

The fixed success fee regime works
well. Consideration could be given to extending this to other types
of cases (e.g. clinical negligence cases).

Question 7

We agree that the limit of the success
fee which lawyers should charge on a case should remain at
100%.

Question 8

We consider that compensation for
Claimants in personal injury cases is sacrosanct. In other words,
the courts award damages to Claimants for the losses suffered and
there is no excess available to Claimants to pay success fees.
(Indeed the rule in Roberts v Johnston forces Claimants to
“borrow” the actual costs of accommodation from other heads of
damages). In many respects the quantum of damages recovered by the
Claimant is not relevant to the amount of success fee. The present
system recognises this because the success fee is based on costs
not damages.

We agree with the Law Society view that ATE premiums are a major
contributor towards legal costs over which solicitors have no
control. We also agree that the ATE insurance market is largely
unregulated and presumably allows ATE insurance companies to make
substantial profits.

We consider that the Qualified One Way Cost shifting suggested
by Lord Justice Jackson in his report would ameliorate the position
and drive ATE insurers out of the market (see below).

We also agree with Lord Justice Jackson’s response to the
government paper that the Claimants’ own disbursements should be
claimable under a newly formed Legal Aid system where those
disbursements could be repaid by successful claimants (with some
interest) at the end of the case. With appropriate management this
disbursements funding could be self funding.

Our responses to the questions on page
35 of the Consultation Paper are as follows:-

Question 11

We agree that ATE insurance premiums
should no longer be recoverable from the losing party in personal
injury litigation subject to the introduction of Qualified One Way
Cost shifting and a Legal Aid system to take care of
disbursements.

Question 12

Not applicable.

Question 13

Not applicable.

Question 14

We suggest that if the Qualified One
Way Cost shifting and, or our proposal for Legal Aid funding of
disbursements are not taken up then the government should consult
with ATE insurers to ensure that there is a product to cover
Claimants’ disbursements in personal injury and clinical negligence
cases at reasonable cost. In these circumstances the premium should
be recoverable from the Defendants.

Question 15

If a disbursement scheme is necessary
(see question 14) through ATE insurers then recoverability should
be allowed for all “reasonable disbursements” (i.e. those which are
presently recoverable on the standard basis and may need to include
Counsel’s fees).

Question 16

We would expect recoverability of ATE
premiums (if required) for disbursements to be limited to
Conditional Fee cases (e.g. we would not expect it to apply to
Legal Aid cases in clinical negligence claims).

Question 17

Please see our answer to question 11
above.

Question 18

If the government accepts our response
to question 11 then the self insurance element by membership of
organisations will not need to be recoverable pursuant to Section
30 of the Access to Justice Act 1999.

We agree with Lord Justice Jackson’s view that general damages
are already too low. If the government accepts the Jackson proposal
that the increase in general damages is to help pay for the costs
of recoverability of success fees (which we do not agree with) then
the increase needs to be very substantially higher. In addition,
this could be dealt with by imposing significant sanctions on
Defendants where they fail to beat Claimant Part 36 Offers which
could help to fund success fees (see below).

In response to the questions on page
19 of the Consultation Paper we say as follows:-

Question 19

We consider that successful Claimants
should receive awards of higher general damages in any event. We do
not consider that 10% will compensate a Claimant for the loss of
recoverability of success fees.

Question 20

We do not consider that an increase in
general damages should be limited to CFA Claimants and, or Legally
Aided Claimants. It would be unfair and unworkable to adopt such a
scheme. If an increase is going to be made it needs to be made
across the board.

Part 36 Offers (Consultation
Paper Section 2.4, pages 40-45)

Part 36 Offers should be the bedrock of the English civil
litigation system. In other words, either the Claimant or the
Defendant should be able to make an offer which if beaten at trial
will have serious consequences to either the Claimant or the
Defendant.

We have noted the views of Lord Justice Jackson in his response
letter to the Lord Chancellor (14 January 2011). We consider his
proposals in respect of the percentage increase in damages to be
acceptable (subject to the proviso below).

However, we do not agree that there
should be a discretion to the court to award less than the sums
Lord Justice Jackson proposes at 5.3 of his paper. It is precisely
because the court have had such discretion that Claimants’ Part 36
Offers are largely unused in the present system. Most Claimants
think that in the end the courts will not award a sufficient sum to
the Claimant if he successfully beats a Part 36 Offer.

We also consider that Part 36 Offers
on liability should have the same effect. It would be absurd not to
give an increased award in these circumstances. The purpose of a
Part 36 Offer on either side is to try to settle the case without a
trial. This must be encouraged in liability issues as well as
quantum issues.

Our response to the questions set out
on page 45 of the Consultation Paper are:-

Question 21

We agree to the proposal that an
additional payment equivalent to 10% increase in total damages

where a Claimant obtains judgment at
least as advantageous as his own Part 36 Offer.

Question 22

It should apply to liability and
quantum cases.

Question 23

Yes.

Question 24

This proposal should apply to all
cases no matter what the value. We consider that a cap is
probably

necessary and would support the
Jackson view that this should be a maximum of £75,000.

We agree with the Jackson principle that a losing Defendant
would continue to pay a winning Claimant’s costs but a losing
Claimant would only pay a winning Defendant’s costs where, and to
the extent that, in all the circumstances it is reasonable to do
so. We agree with the Consultation Paper which proposes:-

“A presumption that the Claimant
would not be liable to pay the Defendant’s costs, unless –
on

application by the Defendant made
as early in the proceedings as possible – orders that
financial

circumstances are such that the
Claimant should be liable for the costs.”

This would enable the parties to understand the relevant
position on costs from the outset of the case and would ensure that
Claimants know their real liability for costs from the earliest
point in the litigation.

Our response to the questions posed on
pages 56-57 of the Consultation Paper are:-

Question 28

Yes we agree.

Question 29

Yes. Please see above.

Question 30

No. We consider that should only apply
to personal injury and clinical negligence cases.

Question 31

The financial status of the
Claimant.

Question 32

QOCS should apply to all Claimants,
however funded.

Question 33

QOCS should apply to all Claimants in
personal injury and clinical negligence cases who are largely
individuals. The proposal that the Defendant should make an
application at the beginning of the case to change the presumption
means that this can be dealt with on an individual basis.

Question 34

We do not agree that the Claimant
should be responsible for a fixed amount of costs in any event as
suggested in the government’s consultation paper. As above, if the
Claimant is of reasonable financial status then he will know at the
beginning of the case that he is likely to be liable for the
Defendant’s costs. If this be the case then he may be able to
obtain some form of insurance.

Question 35

Not applicable.

Supplementary Legal Advice
Scheme

We agree with the principle of a
supplementary legal advice scheme.

Alternative Recommendations on
Recoverability

We have considered the two alternative packages proposed by the
government. Neither reflects our

views and we would not welcome the
introduction of either of those packages. Questions 36-39 are

therefore not considered.

Proportionality of
Costs

We agree with the principle of proportionality of costs as set
out in Lord Woolf’s Access to Justice

Report. Our response to the questions
at page 69 of the Consultation Paper are as follows:-